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Subtitle B--Direct Graduate Medical Education

SEC. 511. AUTHORITY TO INCLUDE COSTS OF TRAINING OF CLINICAL PSYCHOLOGISTS IN PAYMENTS TO HOSPITALS.

Effective for cost reporting periods beginning on or after October 1, 1999, for purposes of payments to hospitals under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) for costs of approved educational activities (as defined in section 413.85 of title 42 of the Code of Federal Regulations), such approved educational activities shall include the clinical portion of professional educational training programs, recognized by the Secretary, for clinical psychologists.

TITLE VI--PROVISIONS RELATING TO PART C (MEDICARE+CHOICE PROGRAM) AND OTHER MEDICARE MANAGED CARE PROVISIONS

Subtitle A--Medicare+Choice Payment Reforms

SEC. 601. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH PERCENTAGE IN 2001 AND 2002.

Section 1853(c)(6)(B) (42 U.S.C. 1395w-23(c)(6)(B)) is amended--

(1) in clause (iv), by striking `for 2001, 0.5 percentage points' and inserting `for 2001, 0 percentage points'; and

(2) in clause (v), by striking `for 2002, 0.3 percentage points' and inserting `for 2002, 0 percentage points'.

SEC. 602. REMOVING APPLICATION OF BUDGET NEUTRALITY FOR 2002.

Section 1853(c) (42 U.S.C. 1395w-23(c)) is amended--

(1) in paragraph (1)(A), in the matter following clause (ii), by inserting `(except for 2002)' after `multiplied'; and

(2) in paragraph (5), by inserting `(except for 2002)' after `for each year'.

SEC. 603. INCREASE IN MINIMUM PAYMENT AMOUNT.

Section 1853(c)(1)(B)(ii) (42 U.S.C. 1395w-23(c)(1)(B)(ii)) is amended--

(1) by striking `(ii) For a succeeding year' and inserting `(ii)(I) Subject to subclause (II), for a succeeding year'; and

(2) by adding at the end the following new subclause:

`(II) For 2001 for any area in any Metropolitan Statistical Area with a population of more than 250,000, $475 (and for any area outside such an area, $425).'.

SEC. 604. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND IN 2002.

Section 1853(c)(2) (42 U.S.C. 1395w-23(c)(2)) is amended--

(1) by striking the period at the end of subparagraph (F) and inserting a semicolon; and

(2) by adding after and below subparagraph (F) the following:

`except that a Medicare+Choice organization may elect to apply subparagraph (F) (rather than subparagraph (E)) for 2002.'.

SEC. 605. INCREASED UPDATE FOR PAYMENT AREAS WITH ONLY ONE OR NO MEDICARE+CHOICE CONTRACTS.

(a) IN GENERAL- Section 1853(c)(1)(C)(ii) (42 U.S.C. 1395w-23(c)(1)(C)(ii)) is amended--

(1) by striking `(ii) For a subsequent year' and inserting `(ii)(I) Subject to subclause (II), for a subsequent year'; and

(2) by adding at the end the following new subclause:

`(II) During 2002 and 2003, in the case of a Medicare+Choice payment area in which there is no more than 1 contract entered into under this part as of July 1 before the beginning of the year, 102.5 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for the previous year.'.

(b) CONSTRUCTION- The amendments made by subsection (a) shall not affect the payment of a first time bonus under section 1853(i) of the Social Security Act (42 U.S.C. 1395w-23(i)).

SEC. 606. 10-YEAR PHASE-IN OF RISK ADJUSTMENT AND NEW METHODOLOGY.

Section 1853(a)(3)(C)(ii) (42 U.S.C. 1395w-23(c)(1)(C)(ii)) is amended--

(1) in subclause (I), by striking `and' at the end;

(2) in subclause (II), by striking `2002.' and inserting `2002 and 2003.'; and

(3) by adding at the end the following:

`(IV) 30 percent of such capitation rate in 2004 (in which such methodology should reflect a blend of 20 percent of only data from inpatient settings and 10 percent of data from all settings);

`(V) 40 percent of such amount in 2005 (in which such methodology should reflect a blend of 10 percent of only data from inpatient settings and 30 percent of data from all settings);

`(VI) 50 percent of such amount in 2006 (in which such methodology should reflect data from all settings);

`(VII) 60 percent of such amount in 2007 (in which such methodology should reflect data from all settings);

`(VIII) 70 percent of such amount in 2008 (in which such methodology should reflect data from all settings);

`(IX) 80 percent of such amount in 2009 (in which such methodology should reflect data from all settings);

`(X) 90 percent of such amount in 2010 (in which such methodology should reflect data from all settings); and

`(XI) 100 percent of such amount in any subsequent year (in which such methodology should reflect data from all settings).'.

SEC. 607. PERMITTING PREMIUM REDUCTIONS AS ADDITIONAL BENEFITS UNDER MEDICARE+CHOICE PLANS.

(a) IN GENERAL-

(1) AUTHORIZATION OF PART B PREMIUM REDUCTIONS- Section 1854(f)(1) (42 U.S.C. 1395w-24(f)(1)) is amended by adding at the end the following new subparagraph:

`(F) PREMIUM REDUCTIONS-

`(i) IN GENERAL- Subject to clause (ii), as part of providing any additional benefits required under subparagraph (A), a Medicare+Choice organization may elect a reduction in its payments under section 1853(a)(1)(A) with respect to a Medicare+Choice plan and the Secretary shall apply such reduction to reduce the premium under section 1839 of each enrollee in such plan as provided in section 1840(i).

`(ii) AMOUNT OF REDUCTION- The amount of the reduction under clause (i) with respect to any enrollee in a Medicare+Choice plan--

`(I) may not exceed 120 percent of the premium described under section 1839(a)(3); and

`(II) shall apply uniformly to each enrollee of the Medicare+Choice plan to which such reduction applies.'.

(2) CONFORMING AMENDMENTS-

(A) ADJUSTMENT OF PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS- Section 1853(a)(1)(A) (42 U.S.C. 1395w-23(a)(1)(A)) is amended by inserting `reduced by the amount of any reduction elected under section 1854(f)(1)(F) and' after `for that area,'.

(B) ADJUSTMENT AND PAYMENT OF PART B PREMIUMS-

(i) ADJUSTMENT OF PREMIUMS- Section 1839(a)(2) (42 U.S.C. 1395r(a)(2)) is amended by striking `shall' and all that follows and inserting the following: `shall be the amount determined under paragraph (3), adjusted as required in accordance with subsections (b), (c), and (f), and to reflect 80 percent of any reduction elected under section 1854(f)(1)(F).'.

(ii) PAYMENT OF PREMIUMS- Section 1840 (42 U.S.C. 1395s) is amended by adding at the end the following new subsection:

`(i) In the case of an individual enrolled in a Medicare+Choice plan, the Secretary shall provide for necessary adjustments of the monthly beneficiary premium to reflect 80 percent of any reduction elected under section 1854(f)(1)(F). This premium adjustment may be provided directly or as an adjustment to any social security, railroad retirement, and civil service retirement benefits, to the extent which the Secretary determines that such an adjustment is appropriate and feasible with the concurrence of the agencies responsible for the administration of such benefits.'.

(C) INFORMATION COMPARING PLAN PREMIUMS UNDER PART C- Section 1851(d)(4)(B) (42 U.S.C. 1395w-21(d)(4)(B)) is amended--

(i) by striking `PREMIUMS- The' and inserting `PREMIUMS-

`(i) IN GENERAL- The'; and

(ii) by adding at the end the following new clause:

`(ii) REDUCTIONS- The reduction in premiums, if any.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to years beginning with 2002.

SEC. 608. DELAY FROM JULY TO NOVEMBER 2000, IN DEADLINE FOR OFFERING AND WITHDRAWING MEDICARE+CHOICE PLANS FOR 2001.

Notwithstanding any other provision of law, the deadline for a Medicare+Choice organization to withdraw the offering of a Medicare+Choice plan under part C of title XVIII of the Social Security Act (or otherwise to submit information required for the offering of such a plan) for 2001 is delayed from July 1, 2000, to November 15, 2000, and any such organization that provided notice of withdrawal of such a plan during 2000 before the date of enactment of this Act may rescind such withdrawal at any time before November 15, 2000.

SEC. 609. REVISION OF PAYMENT RATES FOR ESRD PATIENTS ENROLLED IN MEDICARE+CHOICE PLANS.

(a) IN GENERAL- Section 1853(a)(1)(B) (42 U.S.C. 1395w-23(a)(1)(B)) is amended by adding at the end the following: `In establishing such rates the Secretary shall provide for appropriate adjustments to increase each rate to reflect the demonstration rate (including the risk-adjustment methodology associated with such rate) of the social health maintenance organization end-stage renal disease demonstrations established by section 2355 of the Deficit Reduction Act of 1984 (Public Law 98-369; 98 Stat. 1103), as amended by section 13567(b) of the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66; 107 Stat. 608), and shall compute such rates by taking into account such factors as renal treatment modality, age, and the underlying cause of the end-stage renal disease.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to payments for months beginning with January 2002.

(c) PUBLICATION- The Secretary of Health and Human Services, not later than 6 months after the date of enactment of this Act, shall publish for public comment a description of the appropriate adjustments described in the last sentence of section 1853(a)(1)(B) of the Social Security Act (42 U.S.C. 1395w-23(a)(1)(B)), as added by subsection (a). The Secretary shall publish such adjustments in final form by not later than July 1, 2001, so that the amendment made by subsection (a) is implemented on a timely basis consistent with subsection (b).

SEC. 610. MODIFICATION OF PAYMENT RULES FOR CERTAIN FRAIL ELDERLY MEDICARE BENEFICIARIES.

(a) MODIFICATION OF PAYMENT RULES- Section 1853 (42 U.S.C. 1395w-23) is amended--

(1) in subsection (a)--

(A) in paragraph (1)(A), by striking `subsections (e), (g), and (i)' and inserting `subsections (e), (g), (i), and (j)';

(B) in paragraph (3)(D), by inserting `paragraph (4) and' after `Subject to'; and

(C) by adding at the end the following new paragraph:

`(4) EXEMPTION FROM RISK-ADJUSTMENT SYSTEM FOR FRAIL ELDERLY BENEFICIARIES ENROLLED IN SPECIALIZED PROGRAMS-

`(A) IN GENERAL- In applying the risk-adjustment factors established under paragraph (3) during the period described in subparagraph (B), the limitation under paragraph (3)(C)(ii)(I) shall apply to a frail elderly Medicare+Choice beneficiary (as defined in subsection (j)(3)) who is enrolled in a Medicare+Choice plan under a specialized program for the frail elderly (as defined in subsection (j)(2)) during the entire period.

`(B) PERIOD OF APPLICATION- The period described in this subparagraph begins with January 2001, and ends with the first month for which the Secretary certifies to Congress that a comprehensive risk adjustment methodology under paragraph (3)(C) that takes into account the factors described in subsection (j)(1)(B) is being fully implemented.'; and

(2) by adding at the end the following new subsection:

`(j) SPECIAL RULES FOR FRAIL ELDERLY ENROLLED IN SPECIALIZED PROGRAMS FOR THE FRAIL ELDERLY-

`(1) DEVELOPMENT AND IMPLEMENTATION OF NEW PAYMENT SYSTEM-

`(A) IN GENERAL- The Secretary shall develop and implement (as soon as possible after the date of enactment of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 2000) a payment methodology for frail elderly Medicare+Choice beneficiaries enrolled in a Medicare+Choice plan under a specialized program for the frail elderly (as defined in paragraph (2)(A)).

`(B) FACTORS DESCRIBED- The methodology developed and implemented under subparagraph (A) shall take into account the prevalence, mix, and severity of chronic conditions among frail elderly Medicare+Choice beneficiaries and shall include--

`(i) medical diagnostic factors from all provider settings (including hospital and nursing facility settings);

`(ii) functional indicators of health status; and

`(iii) such other factors as may be necessary to achieve appropriate payments for plans serving such beneficiaries.

`(2) SPECIALIZED PROGRAM FOR THE FRAIL ELDERLY DEFINED-

`(A) IN GENERAL- In this part, the term `specialized program for the frail elderly' means a program that the Secretary determines--

`(i) is offered under this part as a distinct part of a Medicare+Choice plan;

`(ii) primarily enrolls frail elderly Medicare+Choice beneficiaries; and

`(iii) has a clinical delivery system that is specifically designed to serve the special needs of such beneficiaries and to coordinate short-term and long-term care for such beneficiaries through the use of a team described in subparagraph (B) and through the provision of primary care services to such beneficiaries by means of such a team at the nursing facility involved.

`(B) SPECIALIZED TEAM DESCRIBED- A team described in this subparagraph--

`(i) includes--

`(I) a physician; and

`(II) a nurse practitioner or geriatric care manager; and

`(ii) has as members individuals who--

`(I) have special training in the care and management of the frail elderly beneficiaries; and

`(II) specialize in the care and management of such beneficiaries.

`(3) FRAIL ELDERLY MEDICARE+CHOICE BENEFICIARY DEFINED- In this part, the term `frail elderly Medicare+Choice beneficiary' means a Medicare+Choice eligible individual who--

`(A) is residing in a skilled nursing facility (as defined in section 1819(a)) or a nursing facility (as defined in section 1919(a)) for an indefinite period and without any intention of residing outside the facility; and

`(B) has a severity of condition that makes the individual frail (as determined under guidelines approved by the Secretary).'.

(b) EFFECTIVE DATE- The amendments made by this section shall take effect on the date of enactment of this Act.

SEC. 611. FULL IMPLEMENTATION OF RISK ADJUSTMENT FOR CONGESTIVE HEART FAILURE ENROLLEES FOR 2001.

(a) IN GENERAL- Section 1853(a)(3)(C) (42 U.S.C. 1395w-23(a)(3)(C)) is amended--

(1) in clause (ii), by striking `Such risk adjustment' and inserting `Except as provided in clause (iii), such risk adjustment'; and

(2) by adding at the end the following new clause:

`(iii) FULL IMPLEMENTATION OF RISK ADJUSTMENT FOR CONGESTIVE HEART FAILURE ENROLLEES FOR 2001-

`(I) EXEMPTION FROM PHASE-IN- Subject to subclause (II), the Secretary shall fully implement the risk adjustment methodology described in clause (i) with respect to each individual who has had a qualifying congestive heart failure inpatient diagnosis (as determined by the Secretary under such risk adjustment

methodology) during the period beginning on July 1, 1999, and ending on June 30, 2000, and who is enrolled in a coordinated care plan that is the only coordinated care plan offered on January 1, 2001, in the service area of the individual.

`(II) PERIOD OF APPLICATION- Subclause (I) shall only apply during the 1-year period beginning on January 1, 2001.'.

(b) EXCLUSION FROM DETERMINATION OF THE BUDGET NEUTRALITY FACTOR- Section 1853(c)(5) (42 U.S.C. 1395w-23(c)(5)) is amended by striking `subsection (i)' and inserting `subsections (a)(3)(C)(iii) and (i)'.

SEC. 612. INCLUSION OF COSTS OF DOD MILITARY TREATMENT FACILITY SERVICES TO MEDICARE-ELIGIBLE BENEFICIARIES IN CALCULATION OF MEDICARE+CHOICE PAYMENT RATES.

Section 1853(c)(3) (42 U.S.C. 1395w-23(c)(3)) is amended--

(1) in subparagraph (A), by striking `subparagraph (B)' and inserting `subparagraphs (B) and (E)'; and

(2) by adding at the end the following new subparagraph:

`(E) INCLUSION OF COSTS OF CERTAIN DOD MILITARY TREATMENT FACILITY SERVICES TO MEDICARE-ELIGIBLE BENEFICIARIES-

`(i) IN GENERAL- In determining the area-specific Medicare+Choice capitation rate under subparagraph (A) for a year (beginning with 2001), the annual per capita rate of payment for 1997 determined under section 1876(a)(1)(C) for a Medicare+Choice payment area that is within 1 or more MTF affected areas (as defined in clause (ii)) shall be increased by the sum of the MTF percentages (as described in clause (iii)) for the MTF affected area or areas. The increase under this subparagraph shall not be taken into account in computing the national standardized annual Medicare+Choice capitation rate under paragraph (4)(B).

`(ii) MTF AFFECTED AREA DEFINED- In this subparagraph, the term `MTF affected area' means, with respect to a military treatment facility (as defined in subsection (a)(6) of section 1896), an area that includes the following:

`(I) The Medicare+Choice payment area in which a military treatment facility that was part of the medicare subvention demonstration project under such section as of July 1, 2000, is located.

`(II) Any Medicare+Choice payment area which is contiguous to the area described in subclause (I) and located not farther than 40 miles from the facility.

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